3 Retail Stocks Nudging The Industry Higher
- The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BUILDERS FIRSTSOURCE reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BUILDERS FIRSTSOURCE continued to lose money by earning -$0.44 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus -$0.44).
- The debt-to-equity ratio is very high at 28.11 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, BLDR's quick ratio is somewhat strong at 1.36, demonstrating the ability to handle short-term liquidity needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Building Products industry and the overall market, BUILDERS FIRSTSOURCE's return on equity significantly trails that of both the industry average and the S&P 500.
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